Filling in the blanks

While only 19% of workers were enrolled in qualified high-deductible plans in 2012, participation has steadily increased from 8% in 2009, according to the Kaiser Family Foundation. As these plans become more popular, employers should take special note of gaps in employees' understanding to make sure the plan is utilized as it was intended.

For example, even though 84% of participants in a recent study of high-deductible health plans know their plan includes a deductible (and 70% could correctly name the dollar amount within a 20% range), nearly half of all study participants mistakenly believe that their deductible applied to both preventive and non-preventive office visits and medical tests.

Further, the Kaiser Foundation Research Institute study reveals that fewer than one-in-five participants understand that a preventive office visit is exempt from their deductible, and only one-in-10 understand that preventive tests also are exempt.

Similarly, 48.3% of participants thought that all medical tests applied toward their deductible, unaware that preventive tests or screenings, or both, would cost them little out of pocket. On the other hand, 31.7% of respondents thought that neither preventive nor nonpreventive office visits were subject to the deductible, including those respondents who didn't realize they had any deductible at all. Forty-one percent, meanwhile, believed that neither preventive nor nonpreventive medical tests and screenings were subject to the deductible.

If consumers are unaware of their specific health plan details, they may avoid preventive care unnecessarily, leading to more serious health issues and higher costs down the road.

In fact, despite access to free or modest copayments for preventive care as part of their small-group employer's plan, nearly one-in-five consumers report that cost concerns have led them to delay or avoid preventive office visits or tests. Those unaware that preventive office visits are exempt from their deductible were significantly more likely to avoid these visits because of cost concerns, according to the study of primary subscribers of Kaiser Permanente Northern California health savings account-eligible high-deductible plans in 2008.

The study reveals similar results for participants avoiding medical tests and screenings due to cost concerns.

Even if participants understand that preventive care is free under an HDHP, some forgo doctor's appointments to avoid paying for other nonexempt medical tests or follow-up appointments, explains study coauthor Mary E. Reed, staff scientist at the Kaiser Permanente Northern California Division of Research.

"It comes down to better education," believes WorldatWork's benefits practice leader, Lenny Sanicola. "There's a lot of misunderstanding about how these plans work, so I think that we as employers need to do a better job communicating against misconceptions that these plans are for people who are mostly healthy and people with higher income. They can be appropriate for a variety of people."

'What's in it for me?'

Sanicola suggests employers start communicating around the most relevant provisions for participants during and after open enrollment, such as cost, prescriptions, urgent/ER care, and copays/coinsurance amounts for doctor visits.

"I think you need to start with the 'What's in it for me?' approach and build the communication campaign targeted around that [mindset]," he says.

Dawn Kalamaras, a benefits executive and member of the WorldatWork benefits advisory board, suggests communicating important points at key times throughout the year to keep the information fresh. For instance, sponsors could link the beginning of the school year with messaging on preventive care and school inoculations.

"Try to tie [communication] to key events in the employee's life so they notice [the benefit] and use it," she explains.

Kaiser Permanente has discovered that employees push aside written materials because it feels like homework and the information isn't relevant at the moment.

"We've learned that 'just-in-time' communication is really effective. So rather than sending expensive materials at the point of enrollment, we call them before their first visit to remind them how that might work, and we give a targeted call afterward as well to make sure they know what the next steps will be," says Christine Paige, senior vice president of marketing and Internet services at Kaiser Permanente.

HSA can improve employee perceptions

If an HDHP is connected to an HSA or HRA, employers need to explain this additional layer clearly to participants.

"It's one thing to introduce cost-sharing with plans that have deductibles; it's another thing to introduce the plans with health savings accounts, which are another level of complexity," says Paige. "It requires quite a bit of support to help employees take full advantage of those benefit designs," she adds.

Kalamaras affirms that offering an HSA, especially with employer-contributed funds, improves employees' opinion of the HDHP.

"I've noticed that if I rolled out a high-deductible health plan with an HSA or HRA, it takes the sear out of the initial high-deductible," she explains, because it shows that the employer shares responsibility and cost with workers.

"Employees appreciate that it's their money going forward, and it gives them different ways of planning for the future. They start accumulating savings for medical care and planning down the road to retirement," she adds.

Another area of potential misuse in HDHPs centers on medication adherence. While research on the issue is lacking, experts note that troubling economic times could be to blame for a decline in this area.

"It seems that when people are financially strapped - which happened in the past couple of years with job losses and insurance coverage losses - people are inclined not to comply with their medication protocols," says Sanicola, though he notes this trend probably is not unique to HDHP participants.

An EBRI study found that 42% of individuals in their first year of an HDHP didn't take medications as prescribed. However, this number declined among participants who had held their savings accounts for three or more years, suggesting that education and familiarity with the plan may enhance adherence.

Kalamaras advocates implementing smart plan design to encourage optimal care management. For example, employers can make chronic-care maintenance drugs more affordable or give employees reimbursements for certain medications. They can also allow employees to sign up for auto-renewal options.

All things in due time

While common sense plan design and comprehensive communication and education can help speed employees around the learning curve of what an HDHP does and doesn't cover, employers can take heart that research shows that participants' understanding of and satisfaction with HDHPs improves simply through the passage of time.

According to a 2011 WorldatWork report, 57% of plan sponsors noted seeing desired changes in employee behavior when it comes to making employees better consumers of benefits programs. EBRI found that overall satisfaction levels among HDHP enrollees increased from 37% to 52% between 2006 and 2009, yet in 2011 rested at 46%.

As with any major benefit shift, it helps to slowly transition HDHPs into the workplace, the experts say. Kalamaras suggests initially introducing an HDHP alongside the PPO or traditional plan to build awareness, then transitioning to a full replacement by year three, if that's the goal.

Transparent communication to employees regarding the decision behind the shift is imperative, she says, adding that presenting a market comparison of costs, as well as the amount an employer subsidizes for premiums and HSA contributions, gives employees needed context.

"The bottom line," Sanicola says, "is that we're moving away from an entitlement and paternalistic society to more of a defined contribution and shared accountability approach. I don't think it's negative; I think it's a reality."

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